Why Warranties are Becoming Central to Car Dealership Reputations

While the New Year is typically synonymous with hope and optimism, it’s fair to say that this has not filtered through to the automotive industry in the UK.

After all, Brits brought fewer vehicles during 2019 than at any point since the post-recession low in 2013, with new car sales falling by 2.3% year-on-year.

This represents the third consecutive year of decline, following two record sales years in 2015 and 2016. It’s also having a knock-on effect on the used car market, which is simultaneously struggling from the impact of post-sales issues and accessibility of independent online reviews.

This is why warranties are becoming central to the reputation of car dealerships and the used car market as a whole, but how exactly as this come about?

How are Warranties Becoming Central Used Car Dealerships in the UK?

In the digital age, there’s no doubt that consumers have more power and influence over brands than ever before.

This is borne out by the increasingly seminal nature of online reviews, with 93% of Brits claiming that these entities impact directly on their purchase decisions. A further 91% of customers trust online reviews as much as personal recommendations from friends and loved ones, and these trends show no sign of abating anytime soon.

This has created a significant challenge for the used car market, as customers now have a platform from which they can share their experiences with specific dealerships and detail any post-sales issues that they’ve had with models.

Make no mistake; such information can be highly influential in a competitive marketplace like the automotive sector, while online reviews also have the potential to break a specific dealership’s reputation over time.

At the very least, detailed and independent consumer reviews can have a dramatic effect on car dealerships (for better or worse), and this is something that continues to cause concern against an uncertain social and economic backdrop.

How are Dealerships Responding by Providing Warranties

Given the current climate, it’s little wonder that dealerships are becoming increasingly concerned about how they’re perceived by customers.

This has also inspired many to offer longer and more comprehensive third-party warranties on selected models, as a way of minimising the number of unresolved post-sales issues and enhancing the industry’s wider reputation.

Third-party warranties play a pivotal role in safeguarding your automotive investment, particularly in the used car market. After all, while new cars come with a manufacturer’s guarantee, these typically last for just three years on average and subsequently leave motorists at the mercy of post-sale faults and repairs.

In the case of third-party warranties, however, customers can invest in ongoing and extended guarantees that protect used vehicles and minimise the long-term cost of maintenance for owners.

Extended guarantees can be secured through providers such as ALA, who also have a deal with RAC car warranty to provide even more comprehensive coverage on certain vehicles.

Offering this type of extended warranty is certainly a positive move by used car dealerships in the UK, and one that could help to reverse the downward marketplace trends over time.